XCEL Energy Plan Boosts Renewables and Cuts Costs

A plan by Xcel Energy Colorado to boost the share of power it gets from wind and solar and retire a third of its coal generation was green-lighted Monday by state regulators.

The Colorado Public Utilities Commission voted 2-1 in support of what Xcel calls the Colorado Energy Plan, which the company says will cut carbon dioxide emissions by nearly 60 percent, increase renewable energy sources to 55 percent of its mix by 2026 and save customers about $213 million.

As part of the plan, Xcel, Colorado’s largest electric utility, will phase out its Comanche 1 and 2 coal-fired plants in Pueblo about a decade earlier than the original target date of 2035. Xcel says the plan will invest $2.5 billion in eight counties and save customers about $213 million, thanks to the declining costs of renewable energy.

The commission is expected to issue a written decision approving the plan in the first week of September.

Utilities commissioners, staff and supporters said the low costs of wind and solar and the improving technology of batteries that store energy from renewable sources present “a rare opportunity” to advance an energy program that will reduce greenhouse gas emissions while promoting a clean-energy economy.

“The Colorado Energy Plan Portfolio is a transformative plan that delivers on our vision of long-term, low-cost clean renewable energy for our customers, stimulating economic development in rural Colorado, and substantially reducing our carbon emissions,” Alice Jackson, Xcel Energy Colorado president said in a written statement. “We are excited to move forward.”

Xcel’s plan, filed in June, will significantly boost power from renewable energy sources and phase out 660 megawatts of coal power by retiring the two coal-fired units in Pueblo. The utility will add about 1,100 megawatts of wind, 700 megawatts of solar, 275 megawatts of battery storage and 380 megawatts from existing natural gas sources.

One megawatt provides power to 1,100 Colorado homes.

An alternate plan, which the Colorado Office of Consumer Counsel supported, would have slightly reduced the solar and battery storage capacity. Commissioner Wendy Moser, who supported the alternate, said shutting down the coal plants earlier than planned isn’t “going to be free.” “Customers will pay higher rates” to cover the costs, said Moser, who does agree with closing the coal plants. Moser and Commissioner Frances Koncilja also noted that jobs will be lost when the coal plants close. Xcel has said it will try to find other jobs for displaced workers.

The utilities commission staff and others, including a coalition led by the Independence Institute, a libertarian think tank, questioned Xcel’s estimates of savings for customers. Commission adviser Bob Bergman said the staff believes the $213 million projected savings is “likely overstated.” “Most savings won’t occur until after 2034,” Bergman said.

Amy Oliver Cooke, the Independence Institute’s executive vice president, said the ratepayers’ coalition analysis projected no cost savings until 2046 and up to $500 million in rate increases to pay for Xcel’s plan. She said because wind and solar prices keep dropping, it would make better economic sense to wait to build new facilities until prices drop even further.

In 2016, Xcel sought bids from energy companies as it was developing its electric resource plan. Xcel received more than 400 bids, many of those at historically low prices for wind and solar energy. Bergman called the number of bids and prices unprecedented. He said it’s important to take advantage of the low prices, existing tax credits and environmental benefits.

“Colorado’s bold decision to invest in clean energy and a healthier future for the next generation shows what the public — and the marketplace — already know, that conservation and clean energy go hand in hand with a growing, healthy economy,” said Jon Goldin-Dubois, president of Western Resource Advocates.